The effective interest method is regarded as one of the pferred methods for amortizing a bond discount. In theory, investors demand a discount on bonds because the market interest rate at the time of issue exceeds the coupon payments on the bond. Thus, by amortizing the discount at the market interest rate, a company’s accounting statements more closely reflect the economic reality of the bond issue and the firm’s true cost of debt.
Effective Interest Method
外汇网2021-06-19 20:53:59
76
The practice of accounting for the discount at which a bond is sold as an interest expense to be amortized over the life of the bond. Using this method, additional interest expense is calculated using the pvailing market interest rate at the time of the bond issue. The market rate is multiplied by the book value of the bond to find the amount of the discount to be amortized as interest expense each period.
|||
标签：
- 上一篇： Super Sinker
- 下一篇： Tax Anticipation Bill - TAB
随机快审展示
推荐文章
- 黑马在线:均线实战利器 8478 阅读
- 短线交易技术:外汇短线博弈精讲 3848 阅读
- MACD震荡指标入门与技巧 4005 阅读
- 黄金操盘高手实战交易技巧 4334 阅读
- 做精一张图 3092 阅读
热门文章
- 港币符号与美元符号的区别是什么啊？ 23926 阅读
- 我国各大银行汇率为什么不一样啊？ 14165 阅读
- 越南盾对人民币怎么算的？越南盾对人民币汇率换算方法是什么 9780 阅读
- 百利好环球欺诈，不给出金，无法联系。 9203 阅读
- 黑马在线:均线实战利器 8478 阅读